Digitalisation has been one of the buzzwords of this year, with companies across every global industry having to figure out how they can function online as people live their lives from home. Though many companies have risen to the challenge, some have been left behind as they struggle to achieve full, successful and efficient digitalisation as businesses are constantly changing and evolving.
For Andy Campbell, global solution evangelist at FinancialForce, this is particularly true for finance and financial departments. For him, the finance function shouldn’t simply generate reports, budgets, and plans. It should also work with internal stakeholders and customers to provide innovative experiences and organisation-wide value.
Here Andy shares his perspective on the four key shifts businesses need to make to ensure its digital office of finance is well run.
With rapid digital changes in this technology-dependent era, the typical daily duties in the finance department have become outdated and are in need of a swift remodel to meet the expectations of a modern business.
In the past six months, digital transformation has been fast-tracked as the Covid-19 pandemic has highlighted weaknesses in business operations and made clear the need to evolve the role of the finance department. Businesses must be agile, capable of responding rapidly to changing conditions, and the finance office needs to have tight control over the levers of the business. This has expedited the need for change. Though traditional finance functions are still vital, finance leaders need to take on a more modern mindset to keep up with the digital transformation efforts of the business.
This calls for a dramatic reappraisal wherein the role of finance includes more than just plans and budgets, but also takes on a key role in efforts to drive value initiatives across the enterprise. By using a constant stream of data and advanced analytical tools, businesses can look to embrace new models to remain an active competitor in their industry. It’s essential then that the finance department evolves with the company and shifts its mindset to embrace new revenue streams, expand service offerings, optimise business performance and profitability, and help drive customer renewals.
There are four main changes that will progress the finance department, thus emulating the modernisation of the overall company.
New skills for a new world
The days where financial leaders could be valued and measured by their Excel prowess alone are coming to a close. Though traditional accounting skills are still essential in the company’s operations, nowadays financial leaders will also need to comprehend customer experience and satisfaction as well as broaden their business skills and knowledge, in addition to developing an understanding of how the business works and the components that add value. The role of the finance leader has shifted into being a more well-rounded asset to the business, by expanding their skills to sufficiently cater to the needs of the overall business.
Becoming more efficient in decision-making
The rapid developments that occur in a modern business must be reflected in its decision-making processes. The Covid-19 pandemic has brought about a need for speed, with the best example being cash flow, which many companies are now reviewing on a daily basis instead of weekly or even monthly, which they may have done historically. Similarly, monthly closes and quarterly reviews may often be outdated as new information will be received in a constant stream, leaving these reports lacking. The success of a business relies on its capability to make quick changes and accommodate new information. To ensure this, a business should invest in business intelligence (BI) and artificial intelligence (AI) solutions, so as to gain insight on its performance, review trends, look at predictions and, subsequently, adapt itself accordingly.
Matching forecasting technology with the fast-moving developments of the business
In recent months, the necessity of agility and updated risk preparedness has never been clearer. To cope with rapid changes to the business model, the finance department must remain consistent with frequent forecasts, requiring suitable technology to properly accommodate changing variables. Companies have to ensure a plan can be enacted in case of risk scenarios, varying from price wars to a global pandemic.
One way for businesses to remain ahead in the market is by creating new, innovative offers for customers complete with unique presentation. To allow this, real-time data can be used to provide insight into what products and/or services could be successful and what delivers the highest margin. This method will point out other top performers, giving businesses handy information to maintain a competitive edge.
Focusing on customer satisfaction
With the growth in the services economy and a mixed model there is a growing need to focus on methods that can improve customer experience. Finance leaders must understand and involve themselves in operations relating to the customer, such as service delivery, support and other post-sales functions in order to make suitable decisions that will fully meet customer needs.
The lines between the front office and the traditional back-office are becoming more and more blurred, whilst all elements of the cash lifecycle are becoming increasingly interdependent. The finance leader may not want to sell to a customer who never pays bills. Conversely, they may not want to chase a customer debt if said customer is about to place another order. If there are problems on a project that have been escalated, then the customer should not be hassled as it will annoy them. In a modern-day finance office, all of these events are closely connected with one another.